LONDON MARKET PRE-OPEN: Jackpot first half for...

(Alliance News) - Stock prices in London are seen opening slightly lower on Tuesday as global economic recovery hopes continue to be tempered by the fast-spreading Delta variant of Covid-19.

While vaccinations are being rolled out, infection rates continue to climb around the world, forcing some governments - particularly China and Australia - to impose fresh lockdowns and other containment measures.

In early company news, Holiday Inn-owner InterContinental Hotels noted improved first half trading. Gambling firm Flutter Entertainment reported a surge in interim earnings, while the battle to acquire respiratory drugmaker Vectura continued.

IG futures indicate the FTSE 100 index is to open 2.70 points lower at 7,129.60. The blue-chip index closed up 9.35 points, or 0.1%, at 7,132.30 Monday.

InterContinental Hotels Group said trading improved significantly during the first half of 2021, as travel demand returning strongly as vaccines were roll out, restrictions eased and economic activity began to rebuild.

For the six months to June 30, total revenue was USD1.18 billion, down 6% from USD1.25 billion a year before, but IHG swung to an operating profit of USD138 million from a loss of USD233 million.

Revenue per available room - a key metric in the hotel industry - was 20% higher than at the same time in 2020.

IHG noted the Covid-19 pandemic continued to hurt its financial performance through the first half, as government travel restrictions introduced in 2020 were maintained in most markets to varying degrees.

As a result, IHG did not declare an interim dividend, but was confident the resumption of dividend payments would resume in "due course".

"It has been great to see our teams welcome more and more guests back into our hotels, with domestic leisure bookings leading the way, particularly in the US and China. Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back. These trends and the momentum in the business have continued in recent weeks, including in EMEAA where a lifting of travel restrictions in some markets is also now driving improvements in demand. With occupancy and rate continuing to improve, nearly 50% of our hotels achieved RevPAR above 2019 levels in July," said Chief Executive Officer Keith Barr.

Flutter Entertainment said it enjoyed a very strong first half with revenue growth driven by increased average monthly players.

For the six months to June 30, revenue was up 99% at GBP3.05 billion from GBP1.54 billion in the prior year and pretax profit more than tripled to GBP77 million from GBP24 million.

Adjusted earnings before interest, tax, depreciation and amortisation - excluding the US business - doubled to GBP684 million from GBP339 million.

Flutter did not declare an interim dividend but said its payout policy was to be kept under review.

Looking ahead, Flutter expects second half adjusted Ebitda of between GBP1.27 billion to GBP1.37 billion.

CEO Peter Jackson said: "The first half of 2021 exceeded our expectations as we made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base. Our global sports businesses benefited from further enhancements to our products and the return to more normalised sporting calendars while we sustained our strong performance in gaming despite the challenging comparatives set last year.

"In the US, we remain the number 1 online sports betting operator by some distance thanks to the quality of our products and the extensive reach of the FanDuel brand. The customer economics we are seeing in the US bode very well for the future, with early FanDuel customers generating positive payback within the first 12 months of acquisition... In gaming we see an opportunity to grow our market share and look forward to further enhancing our product offering in the coming months."

Philip Morris International said it has switched its Vectura Group bid to a takeover offer from a scheme of arrangement. The US tobacco firm said the move "increases certainty of execution".

Philip Morris said the switch to Vectura takeover offer has consent of UK Takeover Panel and the offer was conditional on more than 50% acceptances.

Philip Morris added that no other changes to the Vectura takeover offer were made ahead of panel-set auction against private equity firm Carlyle Group. This will start on Wednesday and run for five days, ending on Tuesday next week.

In the US on Monday, Wall Street ended mostly lower, with the Dow Jones Industrial Average down 0.2% and S&P 500 down 0.1% but Nasdaq Composite up 0.2%.

US lawmakers on Monday laid out a USD3.5 trillion budget framework, calling it the "most consequential" social spending plan since the 1930s, and launching what are expected to be tough congressional negotiations over the programs it covers.

The 10-year budget blueprint pushes Congress towards the next step in US President Joe Biden's ambitious vision for his first term in office, following on the heels of the USD1.2 trillion infrastructure plan, which the Senate is expected to approve Tuesday in a vote at 1100 in Washington before the measure is sent to the House of Representatives.

The Japanese Nikkei 225 index ended up 0.3% on Tuesday, having reopened after being closed on Monday for a holiday. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was up 0.8%. The S&P/ASX 200 in Sydney closed up 0.3%.

"Asia markets have had a quiet session as rising virus concerns temper enthusiasm here, and this looks set to bleed into today's European open," said CMC Markets analyst Michael Hewson.

"There was also little in the way of direction for US markets, which also traded quietly below last week's record highs, with the Nasdaq regaining some of Friday's lost ground," Hewson added.

The pound was quoted at USD1.3847 early Tuesday, down from USD1.3856 at the London equities close Monday.

On the economic front, UK retail sales growth slowed in July, figures showed, with poor weather partially offsetting an easing in lockdown measures and as the sector tracks tougher comparatives.

According to the latest British Retail Consortium-KPMG sales monitor, total UK retail sales rose 6.4% annually in July, following growth of 3.2% a year earlier. Though still fairly sizeable, July's growth was below the three-month average of 15%.

The euro was priced at USD1.1740, lower from USD1.1748. Against the Japanese yen, the dollar was trading at JPY110.33, up from JPY110.24.

Brent oil was quoted at USD69.36 Tuesday morning, up from USD68.80 late Monday. Gold was trading at USD1,733.63 an ounce, higher against USD1,730.32.

Tuesday's economic calendar has the ZEW economic sentiment indicator for Germany at 1000 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com